Why do we have to buy critical illness insurance when we already have medical insurance?

Ken Becher

Jun 30, 2021

Critical illness insurance can be purchased on a recurring basis. For example, I can buy 500,000 dollar from company A and another 500,000 dollar from company B. If I got a critical illness, then both companies would have to compensate me in which the compensation amount could be superimposed.

Medical insurance can also be bought repeatedly, but the compensation amount of the insurance companies can’t be superimposed.

For example, suppose John bought 20,000 dollar medical insurance from company A and another 20,000 dollar medical insurance from company B.

a) John actually spent 10,000 dollar in the hospital. At this time, if he claims 10,000 yuan from company A, then he can no longer go to company B to settle the claim.

b) John actually spent 30,000 dollar in the hospital. If he first goes to company A to reimburse 20,000 yuan, then he can still go to company B to reimburse another 10,000 dollar.

c) John actually spent 50,000 dollar in the hospital. He can go to company A and company B to reimburse 20,000 dollar each, and the remaining 10,000 dollar can only be paid by himself.

If you compare these two insurance products with different characteristics, it is also a good idea to buy both types of insurance 50/50 if you are unsure which one to buy.

In addition, the real-world situation of medical insurance is more complicated. For example, if you have social security, then the portion being compensated by the social security must be removed first. There are also differences in reimbursement rates between those with or without social security. Besides, there are deductibles, which I won't go into detail here. In short, it is impossible to take advantage of insurance companies by buying more medical insurance.


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